Tuesday, 14 June 2016

Identifying a right investor for your dream project

As you start taking the first steps in the world of entrepreneurship, as your dreams take wings and ideas shift towards reality, the initial challenge of any new business is to find the right investor. For a budding entrepreneur, the first instinct is to accept the cash from wherever it is coming from. Entrepreneurs looking for investors often feel they can't be selective. 

Unfortunately, many later realise that this approach is in the wrong direction. It’s important to understand the impact that the right kind of funding can have on the trajectory of your company in the future years.
A wrong or an unsuitable investor can pull you in the wrong direction, whereas the right one will add value to your team and help you in your journey towards your goal. An investor should bring much more than cash to the table. It is important to consider what are the added benefits that you would receive from a particular investor. It may vary from expertise to access to new markets and that added value of the investor can be the difference between your business remaining a chimera and being an operational entity.
It is, hence, important to ask the following questions before you zero in on an investor for your project -
What are your options - Different investors can execute different goals. For most businesses, however, the first conversations would be with angel investors rather than venture capital firms. Angel investors tend to be flexible on their initial requirements while VCs want concrete data before they back you.
What can the investor bring to the table - You should be aware of the assets and advantages that different investors can provide. Investors are more than just someone providing money. They have experience as well as practical know-how about businesses and can help you manage your capital, your infrastructure and much more.
Where do you find the right investor - Finding the right investor for your company is the first step in realizing its vision. Hence, it is crucial that you know how to connect with them. Today, there are many platforms available that will aid you to find and communicate with potential investors.
How does your investor fit with the company - Your potential investor should be compatible with your company culture. Your visions should be in sync and you want partners who would provide direction without interfering in every decision you make.
How involved do you want your investors to be - You should have a clear ideas on what the role of the investor should be. It should be clearly communicated and agreed upon. Knowing your investor’s level of involvement ahead of time prevents future conflicts.

Other core factors you should take cognizance of, when it comes to potential investors, include their area of focus, their reliability and their reputation. Finding the right investor is the most important step in your entrepreneurial journey. It is a relationship that you have to engage with every day, in the years to come. Choose wisely. Ask questions and do research to select the best investor your company can get. A willing patron and wise mentor who can be the backbone of your company, will go a long way in helping your business prosper.

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